Some claim that PC gaming is dying. However, recent trends as explained by NVIDIA, disagree and it is in fact console gaming that will soon decline, as PCs have some compelling advantages such as ever improving graphics and moddability, to keep the gaming scene thriving. Techgage held a conference call with NVIDIA, where the company explained why PC gaming is on the up and up. PC gaming software sales are growing fast, according to this comparative graph and the predicted crossover point is 2014:

PC processing power is increasing rapidly and is now estimated to be around ten times that of consoles - a compelling advantage and one that will only increase:
So, how long can consoles hold out with their static, aging technology? Not much longer, one would expect.

Another way to measure PC game sales success, is to look at the continuing rise of online digital distribution. As you can see, sales of retail boxed copies have declined, while online sales have shot up:
While not shown on this graph, there's no arguing that the biggest online platform, Steam, is extremely successful and shows no sign of slowing down. PC hardware can now render near photo-realistic graphics that could only be dreamed of a few years ago, making them a much better platform for gaming from a technical perspective. Also, the PC platform is very amenable to modding, which can build huge fanbases for a particular game which helps to drive sales, something consoles sorely lack. Many gamers much prefer the control offered by a keyboard and mouse too. So, console gamers have long mocked PC gamers for the "decline" of their platform, but for how much longer? All this is excellent news for PC enthusiasts who like to play graphically intensive games and gives them a reason to upgrade their hardware regularly to the latest and greatest. No doubt, it makes hardware manufacturers equally happy.

Note that this is NVIDIAs take on it and they have an interest in selling ever more powerful graphics cards, so it's a good idea to watch market trends from various different sources. However, their information seems reasonable enough.

Head on over to the original Techgage article for more details and some comparative screenshots between Battlefield 2 and Battlefield 3. The improvement in realism is really quite amazing and makes BF2 look a bit dated now.

Indeed, then consoles will receive another boost, and then PC will catch up again, and so on and on. No one can beat casual gaming though, and from that angle PC gaming will almost always hold the upper hand due to the inherent larger consumer base.

that said, i think this issue still stands that purchasing PC hardware is much more expensive vs a console, as well, while PC games are developed for ever expanding hardware, consoles obviously do not change. Therefore, PC hardware does not stay relevant as long as a console does, making the move to have to buy two PC in one console generation.

that said, i wish it weren't that way, because PC gaming is ssoo far superior to console gaming its not even funny. From things like steam, which are giant ecosystems, to something universal vs waring consoles, and then the modding community which makes most of the i purchase feel worthwhile, especially now adays where you get so little for what you buy.

that said, i think this issue still stands that purchasing PC hardware is much more expensive vs a console,

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Nonsense! Do you need a computer? Yes? Excellent, spend some money for a graphics card, and we are good to go! Graphics card does not need to be super good, even a lowly 5770 can outgun a console, and that graphics card costs southwards of $100 if you look hard enough, its not that much more expensive. You might say, "but you need a more powerful processor etc", that is true, but again, with a few more dollars you can get yourself a reasonably powerful PC which can play most games with medium eyecandy. This laptop I am using to game (Starcraft 2, TF2, some LoL) costs less £400 about 1.5 years ago, a PS3 slim costs £250 back then. You can hardly find even netbooks for £150 back then.

All games are developed "on" PC hardware, just not "for" PC hardware.
There are no software developement environments that run on a console, AFAIK.
Would be a nightmare writing code with a controller.

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Last time anything used a dev env was the dreamcast afaik

Tell You truth, i would want an emulation layer for PCs so it can play the console games, that way i dont have to buy the console but just the games themselves.

Good 16 Bit Genesis Emulator would have to Be GENS- incorporates Sega CD- CD game and ROM and 32X emulation, far better than on Wii n other consoles. Now just to have the Genesis Controller (Best D-Pad Ive Ever Used)

I read a lot of articles on the gaming industry and market trends (a habit I got into modding and news posting on GPU).
Most of the sales listing always have a little caveat at the botton that says something like "*digital distribution sales not included."

While the number of boxed sets that sell from retail stores is a metric that some retailers want to see, it's not even close to a true representation of PC game sales.
I do not know if Steam releases their sales figures, but they were not doing so in the past, which skewed the numbers to highly favor the consoles.

That's heart-warming but not true.
The release of 'next gen' consoles will change that.

On the other hand, the release on next gen consoles will save PC gaming.
Next gen consoles will have hardware capable of running titles that are worthy of PC. No more "DX9 console ports". ...for at least couple of years
Also, I'm hoping that XBOX7XX <> PC development will become more unified, and it will be cheaper (and commercially 'obvious') to develop to both platforms.